Why is everyone talking about… financial education?

Has one of your employees contacted you for support from the cost of living crisis yet? Nearly 7 in 10 HR professionals have experienced requests for financial education, according to reports last week by People Management. On average, almost one in five (19%) employees have actively approached HR seeking financial wellbeing support. Worryingly, the majority of employees (62%) feel their employers should do more to help support with the pressures that have emerged from the rising cost of living.

Anxiety about finances not only has a hugely negative impact on your employees’ wellbeing, it can also affect employee engagement, motivation and performance, along with increased sick leave and decreased productivity. So, what can be done to prevent that? The employees surveyed here asked for saving schemes (65%), access to money management tools (58%) and financial education or advice (57%). Could financial education be emerging as the latest intentional benefit for employees?

There is a clear trickle-down effect of poor financial wellbeing to poor emotional wellbeing and from there, an inevitable impact on productivity in the workplace, says Scott Read, CEO at Growth Partners PLC. The company experienced a 400% increase in demand for their Employee Assistance Programme heading into the last quarter of 2023. 

He explains: “Looking out for your employees’ financial wellbeing is incredibly important, and the benefits for them and you are more tangible than you may think. Financial worries negatively impact employee productivity and absence rates, causing the ‘presenteeism’ effect.”

As it is highly likely at least some of your employees are experiencing financial stress at this very minute, now is the time to be proactive about getting them the support they need in work.

As a HR department, thankfully a few small initiatives can help to lessen the burden of financial stress for your employees. This may range from employing a financial expert for a ‘Lunch and Learn’ around the basics such as budgeting, to ensuring employees are receiving fair and equitable compensation at current market rates. Read recommends the following four areas to focus on to support employees during times of financial pressure:

• Open communication: Employee assistance programs (EAPs) can provide confidential support and counselling for a variety of issues, including financial stress. 

• Flexible working arrangements: Offering flexible working arrangements such as hybrid working, flexible hours and job sharing can help employees save on transportation and childcare costs.

• Fair and competitive compensation: This includes not just base salary, but also benefits such as healthcare, retirement plans, bonuses and other ‘perks’. Do you have an employee discounts scheme? Can you bring salary reviews forward? 

• Financial education and resources: This can include workshops, seminars and online resources. Where do your employees go for financial guidance? Signpost them to reputable sources such as Money Helper’s Budget Planner.

• Employee benefits that actually retain your top talent

• Are fringe benefits the best benefits?

• What are the four pillars of wellbeing?

That's all for this week's edition of Personio Pulse: This Week in HR. Check back next week as we continue to dissect the latest trends impacting the ways we work. 

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